Oakland, Calif., May 30, 2008Can the billions of people living below the poverty line teach the world a lesson about economics that most politicians and academics dont seem to understand? Internationally acclaimed political analyst and author Alvaro Vargas Llosa says they can.

In Lessons from the Poor: Triumph of the Entrepreneurial Spirit (May 30, 2008 / The Independent Institute / $16.95), Vargas Llosa and a team of economists examine a series of success stories from around the world. Their case studies show how entrepreneurialism drives economic development. Unfortunately, in societies dominated by political corruption, high taxes, and regulation, innovators must overcome enormous challenges. Wealth transfer, cronyism, and legal insecurity all conspire against progress. Lessons from the Poor features inspiring examples of entrepreneurship and urges countries to embrace policies that encourage individual initiative and wealth creation, instead of the zero-sum game of wealth redistribution.

The book contains five entrepreneurial case studies which exemplify the creative powers of the human race when everything seems aligned against the individual, says Vargas Llosa, Senior Fellow at the Independent Institute. The researchersmen and women based in Latin American and Africaconducted extensive fieldwork on location in order to understand and then effectively communicate these success stories to other aspiring entrepreneurs around the world.

After reading about the founding of family-run Kola Real in Peru in the 1980s and the success of the informal clothing industry in Nigeria, it is hard to deny the invaluable role of entrepreneurship in the lives of even the poorest people. Without it, the supermarket Nakumatt would not have revolutionized the Kenyan shopping experience beyond the open-air market, and the Argentine barter system would never have become a parallel economy, helping thousands of unemployed citizens battle poverty.

Past scholarship has often focused on the perniciousness of excessive regulation and bureaucracy in poor nations, suggesting that business ventures that were free of suffocating state intervention might have thrived. Some of it has examined the illegal enterprisesthe informal economyemerging from efforts to circumvent the hostile legal system in order to survive. But very few have concentrated on those entrepreneurs who, starting from a condition of extreme poverty, were able to overcome a mountain of obstacles successfully and, operating within the oppressive constraints of the law, create considerable wealth, says Vargas Llosa.

And yet many still struggle to survive. Clearly our past solutions and foreign aid policies have not worked and new ideas and directions are needed, concludes Vargas Llosa. The industrialized and developed countries must find ways to support this drive to innovate and create new products and markets. In Lessons from the Poor, the lessons on entrepreneurialism are clear and learned from the lives of the poorest among us.

The book returns you to the basics of economic life, and even somewhat to life itself. . . . I intend to keep this book on my shelf, for factual reference and even, perhaps, for inspiration. One of the glories of this book is that there is nothing ideological about it. It simply searches the questions, What works and why? . . . This is a valuable and emboldening book.
National Review

. . . extraordinarily important for the great debate over development.
Miami Herald